US hotel-focused private equity firm Brilla Group and Mexican real estate investor IGS are preparing a certificado de capital de desarrollo (CCD) transaction in Mexico’s domestic market, according to regulatory documents. The BRI-IGS fund created will invest in hotel assets throughout Mexico. The target size, to be reached through capital calls, remains to be determined. The fund plans to spend five years making investments and five years exiting. Investors are to receive the principal invested plus a 10% preferred return, with remaining profits divided 80%-20% between investors and the managers. The managers expect an 18% return overall. Actinver is managing the transaction, for which the timing remains unclear. The deal would be the first real estate CCD focused on hotels, and follows several hotel plays appearing in Mexico’s public equity markets, all to take advantage of the increasing domestic travel forested along with expected GDP growth.
Category: United States
Gigante Clinches Office Depot Buy
Grupo Gigante has agreed to buy the remaining 50% of Office Depot Mexico it does not own from Office Depot for MXP8.77bn ($691m), it says. The buyer has arranged a 1-year bridge loan through BBVA and Credit Suisse, according to market sources, and would likely eventually turn to the bond market to replace it. The cash deal comes after the offer Gigante made in February at the same price, and is the conclusion of a strategic process that had also contemplated an IPO for the joint venture formed in 1994. The deal is subject to regulatory approval, and is expected to close within 30 days. Bank of America Merrill Lynch advised Office Depot. Gigante did not respond to a request for comment on the transaction.
BCI Looks to Markets to Fund US Buy
Banco de Credito e Inversiones (BCI) will look to issue shares or bonds after agreeing Friday to buy City National Bank of Florida in the US from Spain’s Bankia for $883m, it says. The Chilean bank calls the deal a “natural step in increasing business abroad,” and notes that it should close in the first quarter of 2014. City has $4.7bn in total assets, compared to BCI’s CLP17.57trn ($35.91bn). The buyer does not give any specifics as to the financing plans, but it has demonstrated access to the USD markets, most recently with a $500m 2023 bond sale in February, through Citi and JPMorgan. LXG Capital, Landmark Capital and Whitecap advised BCI, and Goldman Sachs advised Bankia on Friday’s deal.
PdVSA Brings in Foreign Funds
As the markets wait to see how Venezuela’s new presidential administration will secure international funding, state-owned oil producer PdVSA has agreed to new debt financing from three sources. PdVSA and Russia’s Rosneft have agreed to form a joint exploration venture in Venezuela, the two say, which includes a $1.5bn loan to PdVSA. The Petrovictoria crude oil and natural gas exploration and production joint venture is to be 40% owned by Rosneft and 60% by PdVSA’s Corporacion Venezolana del Petroleo (CVP) subsidiary. CVP will get the $1.5bn loan, and Rosneft also says it will make a $1.1bn payment in two installments to enter the JV, without giving additional details. The joint venture will as part of the Carabobo-2 project move forward the pair’s development of heavy oil reserves. Carabobo-2 North and Carabobo-4 West blocks are included in the project, with reserves estimated at 40bn barrels, Rosneft says. Separately, PdVSA has agreed to a $2bn loan from Chevron, to support the Petroboscan JV the two have, according to local news and wire reports citing remarks from Oil Minister Rafael Ramirez. The loan pays Libor+450bp, though no details on maturity were immediately available. Also, PdDVSA has agreed to a $1bn revolver from US oil services company Schlumberger. Officials at the companies were not available for comment on the terms of the JV or any of the financing.
UNH Clinches Amil Tag-Along
UnitedHealth has completed a tag-along offer for Amil shares, that takes it to 99.18% ownership of the Brazilian health care provider, enough to force a delisting of Amil as planned. The American is spending BRL2.88bn ($1.43bn) to acquire an additional 90.5m shares, or 24.68%, at BRL31.80 per share, representing the BRL30.75 price it agreed to pay Amil’s controllers in October plus a Selic correction. UnitedHealth agreed to pay $4.9bn last year for 60% of Amil, a deal seen as coming at more than 25x price/earnings at the time.
Ecopetrol Ties Up Ex-Im Facility
Colombian state-controlled oil producer Ecopetrol has closed a $847m loan facility, guaranteed by the US Ex-Im Bank, it says. The package includes a $420m, 7-year tranche at Libor+0.65% and a $427m 10-year tranche at Libor+0.90%. JPMorgan, Bank of Tokyo Mitsubishi, Mizuho and Citi are the lenders. Proceeds from the sale will be used to buy goods from US manufacturers. An Ecopetrol spokesman declines to comment on the specific uses.
Mexichem Makes US Buy
Mexichem continues to grow beyond its home market, with the $250m purchase of the base resin assets of PolyOne, the companies say. The US seller is divesting its vinyl dispersion, blending and suspension resin assets in order to shift its focus to specialty chemicals. For Mexichem, the deal boosts its US footprint, especially in the niche market for custom products. The assets booked revenues of $147m in 2012. The transaction is subject to regulatory approvals. The companies did not respond to requests for additional comment.
HRT Sells Air Logistics Business
Brazil’s HRT Participacoes em Petroleo has agreed to sell its air logistics business, Air Amazonia, to US aircraft manufacturer and operator Erickson Air-Crane, for an expected $65m-$75m, it says. The value depends on the final details of a service contract. The oil and gas explorer will sell its 14-helicopter rotary-wing fleet to Erickson, which will for three years service HRT’s Solimoes Basin operations. HRT says selling the business will increase efficiency by letting it focus on exploration, among other benefits.
Goldman Looks to Huaso Market
Goldman Sachs is planning a bond sale in Chile’s domestic market, according to regulatory documents, filing for a program to issue up to UF20m ($964m) at maturities of up to 50 years. Though the program is large, individual Chilean domestic deals tend to be under UF5m at 21 years or less. The bank sees a so-called Huaso bond as a way to expand its business in the country, a bank spokesman says. Santander Chile is managing the deal. Goldman is also in the process opening an office in Santiago and has sold some $300m in Chilean peso-denominated international debt since 2006, the spokesman adds. A sale would make it the first US-based Huaso issuer. The most recent foreign bank to issue in the Huaso market was Brazil’s Banco Pine, raising UF1.5m in December.
AB InBev Hopeful on Modelo Deal
Anheuser-Busch InBev (AB InBev) says it is in talks with the US Department of Justice to resolve the lawsuit seeking to block the purchase of Grupo Modelo, it says, and has asked to suspend the litigation until March 19. The global brewer is hoping its agreement announced last week to sell to sell a Mexican brewery and control of the Corona brand in the US to Constellation Brands for $2.9bn will satisfy regulators. The government is worried that the combination of Ab InBev and Modelo would control too much of the US beer market. Analysts expected that the $20.1bn deal agreed last year to buy the remaining 50% of the Mexican Brewer could proceed following last week’s Constellation agreement.